"Goliath" Troll Under PTAB Review

Friday, July 14, 2017

Someone woke the “anti-troll.” When frivolous patent infringement filings reach a new peak, Unified Patents, the self-proclaimed “anti-troll,” speaks up. Unified Patents is an organization formed to reduce the number of patent suits filed by non-practicing entities, i.e., companies that do not actively manufacture products utilizing their patents.

Non-practicing entities typically seek a quick return on investment from manufacturers who would rather pay a smaller amount to settle a patent infringement suit, valid or not, than defend it. But, isn’t the purpose of patenting an idea to recover royalties from those who want to use it? What exactly makes a patent infringement plaintiff a troll? According to Unified Patents: filing more than eighty lawsuits on a single patent in a little over a year. More guidance is anticipated from the Patent Trial and Appeal Board on this, and more protection from patent troll suits, as the PTAB concludes its inter partes review of one of Unified Patents’ proclaimed “most prolific patent trolls”: SportBrain Holdings, LLC.

David Against Goliath

Likening its battle to protect and prosecute its patent to that of David going up against Goliath, SportBrain claims: “We will slingshot our IP at the offenders!”

Beginning in the year 2000, SportBrain, Inc. launched an early version of wearable fitness technology in the form of a “smart pedometer” known as the SportBrain tracker, which connected and communicated the user’s personal data (think workout start and stop times, steps taken, distance, speed, and pace) seamlessly to the user’s computer via a special “SportPort.” Unfortunately, it didn’t shoot off the blocks. By 2001, the company was shut down, only to be revived as a patent-holding company, SportBrain Holdings, LLC. Formed in early 2016, its sole purpose was filing patent lawsuits. And file it did, launching a litany of litigation in 2016 against many big fitness technology players such as Apple, New Balance, Adidas, and just last week, Guess. All of this was over a single patent: U.S. Patent No. 7,454,002, titled “Integrating personal data capturing functionality into a portable computing device and a wireless communication device.”

The patent was issued to SportBrain in November of 2008 and boasts a method for compiling and analyzing personal data, transmitting the data wirelessly, and providing feedback information. SportBrain claims the patent improves upon the prior art by enabling physical fitness measuring devices to provide quality feedback utilizing the information—for instance, informing a runner that her pace today was faster than her pace yesterday—thereby educating and motivating the athlete to new goals. It is this data collection element of the patent that SportBrain claims makes it so unique and worth protecting. According to SportBrain, “[a]s one of the first to market, successfully traded for 10 years, and then [to be] squeezed out by a plethora of Goliaths was unquestionably devastating.”

In 2008, SportBrain was issued a patent for analyzing and transmitting personal data wirelessly and providing feedback information.

PTAB

According to Unified Patents, suing eighty-plus defendants over a single patent in a little over a year is unquestionably trolling. Unified Patents also filed a petition for PTAB review against two other perceived trolls, Shipping & Transit and Uniloc USA. Shipping & Transit has reportedly filed more than 500 lawsuits alleging patent infringement. However, their initial tactic—a threatening letter and a demand for a one-time license fee—can often scare some recipients into paying before patent-holding companies like Shipping & Transit ever lift a litigious finger. Such tactics have caused certain online groups to retaliate and try to unite manufacturers and producers who have been wrongfully shaken down by such tatics.

Unified Patents has asked the PTAB to initiate inter partes review of SportBrain, Shipping & Transit, and Uniloc USA’s patents, hoping the Board will find them invalid. By granting Unified Patents’ petition and initiating an inter partes investigation, the PTAB has shown the case against SportBrain is, at the very least, worth examining. A decision on the SportBrain petition will undoubtedly have an impact on this behavior going forward.

Conclusion

While the case against these proclaimed “prolific” three—who have filed so many patent infringement suits against so many defendant manufacturers in such a short period of time—may be an easier one to make, it is sometimes harder to sort the Davids from the Goliaths. What other actions do you think the USPTO or PTAB might take to address this type of activity?

As a former Alabama trial and litigation attorney, Annie has a keen eye for expert evidentiary issues and a clear voice for practical solutions. Annie is a published author of both fiction, non-fiction, and a comprehensive legal practitioner's guide to hourly billing published by LexisNexis.

Annie graduated from the University of Alabama School of Law cum laude. While in law school, she served as Vice President of both the Bench and Bar Legal Honor Society and the Farrah Law Society and was a member of the Alabama Trial Advocacy Competition Team as...

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